Norway’s central bank will use ETH ecosystem to issue national currency
- The Norges Bank has released an open source code on GitHub allowing developers to interact with the CBDC test network.
- The Sandbox developments will include some complex and interesting use cases such as batch payments, bridges, and security tokens.
Norway’s central bank – Norges Bank – is now spearheading efforts to build the country’s own central bank digital currency (CBDC). The central bank has decided to release the open source code for its CBDC sandbox.
The sandbox is currently available on GitHub as an open-source Apache 2.0 Licence. It is designed to offer an interface for interacting with the CBDC test network. As per Nahmii, Norges Bank’s official CBDC partner, the open source code will allow developers to enable functions like token burning, token minting, and transferring ERC-20 tokens. The official announcement notes:
In addition to deploying the appropriate smart contracts and access controls, the Norges Bank sandbox includes a custom frontend and network monitoring tools (BlockScout and Grafana). The frontend also shows a filterable summary of transactions on the network.
However, Nahmii added that the current version of the code won’t support Ethereum’s major wallet MetaMask by design. It is only accessible privately by users with appropriate credentials. As a result, the transactions on the test network shall remain private for now.
Additional Sandbox developments will include some complex and interesting use cases such as batch payments, bridges, and security tokens. Along with additional front-end development, it would involve custom smart contract work.
Norges Bank said that they would deliver the second part of the project by mid-September. Soon after that, they would be making the source code publicly available.
Building infrastructure on the Ethereum blockchain
Norway’s central bank announced last Friday that the CBDC prototype infrastructure will be based on the Ethereum technology. Earlier this year in May, the central bank had already given hints about building the CBDC on Ethereum.
Back then, the Norges Bank said that the Ethereum ecosystem shall provide the core infrastructure for CBDC issuance, distribution, and other activities involved. “The prototype will be used to test a number of the important features for DSP,” the central bank said.
Related: Will privacy coins like Monero, Dash, or Zcash rise if CBDCs are coming?
The Norges Bank has been trying to work on its CBDC plans since the last year. In 2021, the central bank also issued a reference paper with possible CBDC designs. Back then it was considering different blockchain options such as Ethereum, Bitcoin as well as Bitcoin SV. However, they seemed to have narrowed down on Ethereum. The official partner noted:
Nahmii AS are proud to be working with Norges Bank and other institutions on this prestigious project and hope that our work together will help to set new standards for public-private partnerships.
The news comes just as the IMF released a report noting that 97 countries and other central banks are exploring CBDCs as of July 2022. So far, only two countries have fully launched their CBDC projects, The Bahamas and Nigeria.
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